30 for 30 Podcast Breaks Down the Phil Ivey Baccarat Scandal

Bart Shirley July 21, 2017 5919 Reads
Podcast on Phil Ivey

ESPN has released a podcast about the baccarat scandal that is rumored to be one of the reasons Phil Ivey did not play in the Main Event of the World Series of Poker this year. The scandal and subsequent podcast on Phil Ivey have raised questions about fairness, fair play, and responsibility for players at a casino and casinos themselves.

According to the podcast, the central figure of the affair was not Ivey himself, but a Chinese baccarat player named Cheung Yin “Kelly” Sun. Sun, according to interviewed experts, the most dangerous “advantage” player in the world.

An advantage player is a player in a casino game who has exactly that – an advantage. For casinos, their entire livelihood is based upon their statistical advantage in the long run. So, a good advantage player is a casino’s worst nightmare.

Advantage play is not cheating. There is no manipulation of the cards, dice, or other devices in the casino.

Instead, an advantage player breaks down the operations of games to look for structural weaknesses. For example, the most well-known example of advantage play is card-counting in blackjack. The card counter is not altering the integrity of the game – he is merely using his mind to gain a statistical advantage.

How baccarat became the target

For  Sun, her game of choice is baccarat. Baccarat is perhaps the simplest of all casino games. Players are betting which group of cards – the banker or the player – can add up closest to 9. Face cards count as zeroes.

Statistically, baccarat has one of the lowest house edges of all casino games. Neither the banker or the player bets surrender more than 1% to the house.

Sun’s gameplan flips these statistics on their heads and generates a situation where the player, not the casino, has an advantage of around 6.5%. She gains this advantage through a practice known as edge sorting.

In a basic sense, edge sorting occurs when players notice asymmetries in the design on the back of the cards and figure out which cards are associated with the observed variations. When Sun combined her ability to edge sort with some specific conditions, the money began rolling in.

Phil Ivey takes things to another level

One of those conditions necessary for big wins is a deep bankroll. A 6.5% advantage is huge, but losses are still quite possible.

Enter poker superstar Phil Ivey. Ivey is widely considered one of the very best poker players in the world. He is also well-known for his heavy spending on other casino games.

Through a couple of connections, Kelly Sun and Phil Ivey met and developed a partnership. Ivey would put up the money and image that would allow Sun to create the perfect storm for her edge sorting to be most effective.

The first big score

In August 2012, Phil Ivey and Kelly Sun entered London’s Crockfords casino with a big money win on their minds. Crockfords, an old-school casino, could cater to the high-profile gambler in a discreet setting.

The pair entered a back area cordoned off for high rollers. This segregation allowed the two to work in relative peace, and with their own dedicated casino personnel to boot. To set the trap, Sun requested four things from Crockford’s’ management:

  • She wanted to play mini-baccarat instead of baccarat. Mini-baccarat is a version of baccarat where the players never deal nor touch the cards. This change is important for defeating allegations that misconduct occurred by way of the players’ dealing.
  • She wanted a dealer who spoke Cantonese. There were two reasons for this request. For one thing, Sun is a native Cantonese speaker and is more comfortable conversing in that language than English. The second reason is cultural – Sun’s next two requests would sound fishy, but given the highly-superstitious nature of many Asian cultures, they would likely be accepted.
  • She wanted the deck sorted to her specifications. This request should’ve been the red flag that a play was happening. Even though Sun wasn’t touching the cards, it should have set off alarm bells for casino management that something was afoot – particularly when the duo started winning.
  • She wanted no deck change at any point. Quite simply, once she got the deck how she wanted it, she didn’t want different cards that would foul up the whole program.

The casino granted all four of these requests, along with granting Ivey the ability to play at higher limits than normally permitted. Any denials would’ve resulted in Ivey and Sun leaving without playing.

Ultimately, Ivey and Sun began betting the equivalent of $150,000 per hand. Due to the edge sorting and a good run of cards, the two managed to win $12,000,000 in less than twenty-four hours.

The house strikes back

Finally, casino management insists on a deck change. The two players call it a night and leave with a receipt for the money, which will be wired shortly.

Crockfords never wires the money. Instead, they examine the surveillance footage of the game and finally figure out what Ivey and Sun were doing.

By the time news of the denied transfer reaches the duo, they are in the midst of taking Borgata in Atlantic City, for another $8,000,000. This game would be the last time the two play baccarat together.

Ivey ended up filing suit against Crockfords for his money. His argument was that the casino could have denied any of his requests, and only lost money through their own failure to see the advantage, rather than any cheating on his part. He certainly played within the rules of the game.

Borgata, for its part, sued Ivey to get him to return the money. So far, things have not gone well for Ivey – courts in England have upheld Crockfords’s decision twice and have called Ivey and Sun’s actions cheating.

The bigger issue

The podcast concludes on the broader theme in this entire incident – the relationship between the casino and the gambler. Casinos have long been content to offer games of chance as long as the games maintained a slight edge in favor of the house.

However, when confronted with big losses due to players exploiting an advantage, casinos have revealed themselves to be more likely to cry foul on the part of the player than to look at their own practices for the cause of the loss. At any point, both Crockfords and Borgata could have avoided losing so much money, but a combination of greed, gullibility, and complacency allowed Ivey and Sun to nearly take the house.

Ivey continues to fight for money he feels he won fair and square. Moreover, he is fighting for his reputation – a “cheater” label in the gambling world is the most scarlet of letters.

On the other hand, Sun continues to fly under the radar, play baccarat, and beat casinos at their own game. She is banned from all MGM properties, but to her mind, there are more suckers around every corner.

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